6 Ways Donald Trump Will Revive the Housing Market in the US

Now that Donald J. Trump has been elected the next president of the United States, there is little doubt that one of the major focuses of his attention in the next months after he is sworn in will be how improve the US housing market. Mortgage rates are near all-time lows and the anticipated rise in employment and median incomes will surely strengthen the housing market across the nation.

There are many things that economists disagree about in the US, but nearly all agree that a strong housing market is vital to economic growth. Specifically, when the housing market is strong, people buy more homes and take out more loans. Builders build more homes, which leads to more economic growth. And when people buy more homes, they buy more goods and services for their homes.

So the housing market is absolutely essential to producing a good economy. We can only speculate on what exactly Trump would do with the housing market as president, but here are a few areas that he may want to explore to boost growth:

#1 Repeal Dodd Frank

The 2010 Dodd Frank law is widely reviled in the housing and lending industries because it makes it very difficult for smaller lenders to do mortgage and other types of loans. Many economists think that the Obama team made the Dodd-Frank law too onerous for many smaller lenders.

#2 Look Into Other Mortgage Finance Reform

Engaging in reform of Fannie Mae and Freddie Mac has always been controversial for many decades. But there is no consensus on what types of government agencies should replace them. Many housing experts say that Trump should take a very strong look at how to get more private capital back into the mortgage markets. They say that there need to be strong alternatives to Fannie Mae and Freddie Mac. We anticipate that FHA-programs will remain aggressive with credit and accessibility. Many bankers have rolled out no doc mortgage loans for people that meet the lending standards

#3 Make Affordability Connected to Mobility

For many home buyers today, one’s zip code will determine how economically mobile they are. This means that almost 50% of people who are currently renting are having a difficult time paying their rent. Meanwhile, about 25% of them are having severe problems paying rent.

Also, only about one out of four people who are supposed to get federal subsidies ever get them. Some experts believe that Trump will be able to help the housing market by boosting the subsidies to many of the households who need them the most. This will help them to move into better communities that are closing to better jobs and better schools.

#4 Boost Building

Housing experts also contend that boosting building in many communities is needed to improve the housing market. By providing more good housing stock in many areas of the US, this will reduce prices and will spur demand and job growth.

Also, there will need to be more spending on infrastructure and transit to make certain that these new neighborhoods are able to grow and expand so that they are not too isolated from major services. Experts think that some of the gridlock in Washington DC in recent years has prevented the federal government from spending enough money on essential infrastructure.

#5 Keep the Rust Belt in Mind

One of the biggest things that Trump can do to revive the housing market is to keep the Rust Belt in mind. What he should remember is that many towns in middle America are dealing with foreclosures and downturns that were not due to over exuberance or recklessness in the housing boom. Rather, there has been major job loss and decline in the industrial base as more jobs have move off shore and to the southern

US. New home buyers may not be excited about buying homes in neighborhoods with many foreclosures. However, perhaps if the Trump administration prioritizes investment into these long neglected communities, home-ownership can increase in these areas.

#6 Keep the Housing Market Stable

Some experts think that because Trump won, he is a largely unknown quantity when it comes to the real estate market, even with all of his experience in apartments and many types of business buildings. Some believe it would make sense for Trump to not do anything dramatic in his first year in office so that the markets are not roiled. The real estate market does not like to see uncertainty, and Trump could represent uncertainty for some people in the market. It will be interesting to see if more no down payment mortgage programs will be rolled out in 2017 and 2018.

Summary

Given that Trump is generally believed to be a more pro-business person than Hillary Clinton, experts largely think that he could be good for the housing market, at least in the medium to long term. Of course, this remains to be seen, but the stock market soared the following weeks after the election and several recent housing surveys indicate a positive outlook for 2017. When he first enters office, there could be some trepidation in the housing market until there is a clearer understanding of what Trump is planning. But with his experience in the real estate business, it is likely that his term in office could be good for the real estate industry.

Share this:

Related

About Tom Murphy

Tom Murphy grew up in La Jolla, California surfing and carving his niche in the local real estate market. Mr Murphy has a stellar record as a loan officer with over a decade of experience helping people secure the right home loan.

The information contained on RefiGuide.org website is for informational purposes only and is not an advertisement for products. The views and opinions expressed on this site are those of the respective authors and do not reflect the policy or position of this company or affiliates. RefiGuide.org is a website that provides information about mortgages. We do not directly offer mortgages, accept applications or approve loans but we work with partners who do. We are not responsible for the accuracy of rates, APR or loan information posted by banks, brokers, lenders or advertisers. Any connected advertisements do not imply affiliation or endorsement by any government agencyThis service is completely free and there is no obligation when you receive rate quotes from any of our competing mortgage companies. Neither RefiGuide.org nor its advertisers charge fees or require anything other than a submission of qualifying information for comparing offers online. Rates and loan guidelines are subject to change without notice. All material on this website is copyrighted. The material on this website should not be used or copied. This site is not a government agency, lender or bank. We are not affiliated with HUD, FHA, USDA or the VA. We do not offer any mortgage refinance products.